Chalmers v. East Valley Fiduciary ( 2021 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
WILLIAM JOHN CHALMERS, Plaintiff/Appellant,
v.
EAST VALLEY FIDUCIARY SERVICES, INC., et al., Defendants/Appellees.
No. 1 CA-CV 21-0163
FILED 12-14-2021
Appeal from the Superior Court in Maricopa County
No. PB2017-001373
The Honorable Thomas Marquoit, Judge Pro Tempore
AFFIRMED IN PART; VACATED AND REMANDED IN PART
COUNSEL
William John Chalmers, Chandler
Plaintiff/Appellant
Gallagher & Kennedy, P.A., Phoenix
By Mark C. Dangerfield, Hannah H. Porter
Counsel for Defendant/Appellee East Valley Fiduciary Services, Inc.
Broening Oberg Woods & Wilson, P.C., Phoenix
By Donald Wilson, Jr., Jathan P. McLaughlin, Kelley M. Jancaitis
Counsel for Defendants/Appellees Doyle Defendants
Zelms Erlich & Mack, Phoenix
By Robert B. Zelms, Anthony S. Vitagliano, Ian R. King
Counsel for Defendants/Appellees Scharber Defendants
Brian J. Theut, Phoenix
Defendant/Appellee
MEMORANDUM DECISION
Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Cynthia J. Bailey and Judge Jennifer M. Perkins joined.
C R U Z, Judge:
¶1 William John Chalmers appeals from the superior court’s
order approving the final inventory and accounting of East Valley
Fiduciary Services, Inc. (“EVFS”). For the following reasons, we affirm in
part, vacate, and remand in part.
FACTUAL AND PROCEDURAL HISTORY
¶2 During dissolution proceedings, Chalmers’ divorce counsel
filed a motion to appoint a guardian ad litem for Chalmers and a notice to
withdraw as counsel. The court appointed Brian J. Theut as Chalmers’
guardian ad litem, and Theut subsequently filed emergency petitions for a
temporary guardianship and conservatorship on Chalmers’ behalf in this
probate matter.
¶3 The court granted the petitions, appointing EVFS as
temporary guardian and temporary conservator. EVFS retained Ryan M.
Scharber to represent it as the temporary guardian and conservator for
Chalmers’ estate, and appointed John M. McKindles as Chalmers’ counsel
in the dissolution matters. Theut continued to serve as Chalmers’ guardian
2
CHALMERS v. EAST VALLEY FIDUCIARY, et al.
Decision of the Court
ad litem. The court appointed Michael J. and Gary T. Doyle to serve as
Chalmers’ counsel in the probate matters. Following their appointment, as
required by Arizona Revised Statutes (“A.R.S.”) section 14-5109(A), the
Doyles filed a notice of the basis of compensation. The record indicates that
EVFS, Scharber, McKindles, and Theut never filed such a notice.
¶4 The guardianship was dismissed after about a month and a
half, but the conservatorship continued for just over a year. During the
conservatorship, the Doyles, EVFS, Scharber, McKindles, and Theut filed
Arizona Rule of Probate Procedure (“Rule”) 33 petitions, requesting
approval of compensation for their services to be paid from Chalmers’
estate. The superior court approved the Rule 33 petitions and fees totaling
$312,939.23 (the “2018 fee orders”).
¶5 After the conservatorship concluded, EVFS submitted its final
inventory and accounting for approval. EVFS, Scharber, McKindles, and
Theut each filed a final Rule 33 petition collectively seeking over $80,000 in
additional fees. The Doyles withdrew as Chalmers’ counsel, and S. Alan
Cook appeared as Chalmers’ new counsel.
¶6 Shortly after, the case was reassigned. The newly-assigned
judge issued a minute entry in which he found that only the Doyles filed
the required notice of the basis of compensation. EVFS filed a response to
the court’s minute entry and characterized its failure to file a notice as a
regrettable “oversight,” but contended that Chalmers was aware of its basis
for compensation throughout the conservatorship. None of the other
parties acknowledged the failure to file a notice of compensation.
¶7 Cook later filed a motion to withdraw from representation of
Chalmers. An evidentiary hearing was held as to the final inventory and
accounting, as well as the pending Rule 33 petitions. Chalmers appeared
without representation and objected to EVFS’s final account and Rule 33
petitions. Chalmers also challenged the previously granted 2018 fee orders
to EVFS, Scharber, McKindles, and Theut, which were also recorded in the
final account.
¶8 The court affirmed the 2018 fee orders finding that any review
of those orders would constitute an improper horizontal appeal, and that it
had no authority to reconsider a prior judge’s rulings. The superior court
further ruled that Chalmers could not appeal the fee request orders because
they were final orders with Arizona Rule of Civil Procedure 54 language,
and the time to appeal had passed. However, the court found that EVFS,
Scharber, McKindles, and Theut failed to comply with the notice
3
CHALMERS v. EAST VALLEY FIDUCIARY, et al.
Decision of the Court
requirements under A.R.S. § 14-5109, and denied the outstanding Rule 33
petitions. The court then approved the remaining final account.
¶9 Chalmers timely appealed. We have jurisdiction pursuant to
A.R.S. § 12-2101(A).
DISCUSSION
¶10 In reviewing the superior court’s judgment in a probate
matter, we accept the superior court’s findings of fact if they are supported
by the record. In re Estate of Stephens, 117 Ariz. 579, 586 (App. 1978). We
review the superior court’s rulings on questions of law de novo. In re Estate
of Headstream, 214 Ariz. 530, 532, ¶ 9 (App. 2007).
¶11 As an initial matter, although the superior court found that
the time to appeal the 2018 fee orders had passed, they do not contain the
full Arizona Rule of Civil Procedure 54(b) or (c) language. See Ariz. R. Civ.
P. 54(c) (“A judgment as to all claims and parties is not final unless the
judgment recites that no further matters remain pending and that the
judgment is entered under Rule 54(c)”); Ariz. R. Civ. P. 54(b) (“[T]he court
may direct entry of a final judgment as to one or more, but fewer than all,
claims or parties only if the court expressly determines there is no just
reason for delay and recites that the judgment is entered under Rule
54(b).”). Accordingly, the 2018 fee orders were never properly certified as
final orders, and the time to appeal has not begun to run on those orders.
¶12 Chalmers contends the superior court erred in failing to
reverse the 2018 fee orders for EVFS, Theut, Scharber, and McKindles on
the basis that doing so would constitute “an impermissible horizontal
appeal.” A horizontal appeal is a request to “a second trial judge to
reconsider the decision of the first trial judge in the same matter, even
though no new circumstances have arisen in the interim and no other
reason justifies reconsideration.” Powell–Cerkoney v. TCR–Mont. Ranch Joint
Venture, II, 176 Ariz. 275, 278-79 (App. 1993). The policy against horizontal
appeals will not be applied “when an error in the first decision renders it
manifestly erroneous or unjust.” Id. at 279; see also Donlann v. Macgurn, 203
Ariz. 380, 385-86, ¶ 29 (App. 2002). Although the superior court found no
new circumstances justified reconsidering the 2018 fee orders, the court did
not address whether the orders were “manifestly erroneous or unjust.” See
id.¶13 In this case, the superior court found that neither EVFS,
Theut, Scharber, or McKindles complied with A.R.S. § 14-5109, which
provides:
4
CHALMERS v. EAST VALLEY FIDUCIARY, et al.
Decision of the Court
When a guardian, a conservator, an attorney or a guardian ad
litem who intends to seek compensation from the estate of a
ward or protected person first appears in the proceeding, that
person must give written notice of the basis of the
compensation by filing a statement with the court and
providing a copy of the statement to all persons entitled to
notice pursuant to §§ 14-5309 and 14-5405. The statement
must provide a general explanation of the compensation
arrangement and how the compensation will be computed.
A.R.S. § 14-5109(A) (emphasis added).
¶14 In an effort to obviate the requirements of A.R.S. § 14-5109,
Theut argues Chalmers was aware attorneys’ fees would be charged
because: he included his hourly rate within the emergency petition for
temporary conservatorship, Chalmers was present for the hearing on
August 18, 2017, Chalmers signed the settlement agreement regarding the
family court matter, and both applications for attorneys’ fees and costs were
filed with the clerk of the court and mailed to Chalmer’s counsel. However,
Theut’s reference to attorneys’ fees in the emergency petition was one
sentence in a nearly fifty-page document that did not “provide a general
explanation of the compensation arrangement and how the compensation
will be computed.” A.R.S. § 14-5109(A). Moreover, Theut was not only
required to file the notice of the basis for compensation with the court, but
he was also required to provide timely notice to all persons entitled to it,
such as Chalmers’ spouse and adult children. Id.; see also A.R.S. §§ 14-5309,
-5405. There is no evidence that Theut complied with the statute’s notice
requirements or that Chalmers waived the same.
¶15 We remand to the superior court to decide whether EVFS’s,
Theut’s, Scharber’s, and McKindles’ failure to comply with this statute
waived their right to seek compensation, and thus whether the 2018 fee
orders were manifestly erroneous or unjust.
¶16 Finally, Chalmers contends it was error to approve the final
account because it is “misleading,” and he was unable to cross-examine
EVFS at the December 2020 hearing regarding its final inventory and
accounting. Chalmers fails to provide evidence that the final account
information was inaccurate. Further, EVFS was present at the hearing, and
Chalmers provided no evidence he was denied the opportunity to call EVFS
as a witness. We find no error in the court’s approval of the remaining final
account.
5
CHALMERS v. EAST VALLEY FIDUCIARY, et al.
Decision of the Court
¶17 We vacate the superior court’s order denying review of the
2018 fee orders, and we vacate that portion of the entry of the final
inventory and accounting. We affirm the court’s approval of the remaining
final account.
CONCLUSION
¶18 For the foregoing reasons, we affirm in part, vacate in part,
and remand for further proceedings consistent with this decision. The
parties request their attorneys’ fees and costs on appeal. In the exercise of
our discretion, we decline to award fees and costs.
AMY M. WOOD • Clerk of the Court
FILED: AA
6